franchise business plan example

Franchise Business Plan Template

Written by Dave Lavinsky

Franchise Business Plan Outline

• Franchise Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan

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Franchise Business Plan

You’ve come to the right place to create your business plan.

We have helped over 10,000 entrepreneurs and business owners with how to create a franchise business plan to start or grow their franchises.

How To Write a Franchise Business Plan & Sample

Below is are links to each section of a franchise business plan example to help you start your own franchise business:

• Executive Summary – This section provides a high-level overview of your business plan. It should include your company’s mission statement, as well as information on the products or services you offer, your target market, and your business goals and objectives.
• Company Overview – This section provides an in-depth look at your company, including information on your franchise’s history, franchise business model, ownership structure, and management team. You will also include a copy of your franchise agreement.
• Industry Analysis – In this section, you will provide an overview of the industry in which your franchise will operate.
• Customer Analysis – In this section, you will describe your target market and explain how you intend to reach them. You will also provide information on your customers’ needs and buying habits.
• Competitive Analysis – This section will provide an overview of your competition, including their strengths and weaknesses. It will also discuss your competitive advantage and how you intend to differentiate your franchise from the competition.
• Marketing Plan – In this section, you will detail your marketing strategy, including your marketing initiatives and promotion plans. You will also discuss your pricing strategy and how you intend to position your own business in the market.
• Operations Plan – This section will provide an overview of your store’s operations, including your store layout, staff, and inventory management.
• Management Team – In this section, you will provide information on your management team, their experience, and their roles in the company.
• Financial Plan – This section includes your company’s financial statements (income statement, balance sheet, and cash flow statement). It also includes information on how much funding you require and the use of these funds.

Next Section: Executive Summary >

Franchise Business Plan FAQs

What is a franchise business plan.

A business plan is a plan to start and/or grow your franchise. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can  easily complete your business plan using our Franchise Business Plan Template here .

What Are the Main Types of a Franchise?

About any type of business can be franchised. Franchises are categorized according to different factors like investment level, franchisor’s strategy, business operations, and marketing and relationship models. The most common types of franchises are job franchise, product or distribution franchise, business format franchise, investment franchise, and conversion franchise.

What Are the Main Sources of Revenues and Expenses for a Franchise?

The main source of revenue for a business franchise are franchise fees and royalty fees. Some also earn from other fees like distribution fees, site assistance fees, training fees, technologies, and rebates.

The key expenses for franchises are inventory, payroll, marketing and advertising, rent and loans.

How Do You Get Funding for Your Franchise?

Among the most common sources of funding for a franchising business are commercial bank loans, Small Business Administration (SBA) loans, personal savings and friends and family loans/gifts. There are also lenders that can supplement other loans with equipment financing and business lines of credit for franchise businesses.

This is true for a business plan for a franchise restaurant, a business plan for franchise store, or any other franchise business plans.

Where Can I Get a Franchise Business Plan PDF?

You can download our free franchise business plan template PDF here . This is a sample franchise business plan template you can use in PDF format.

Franchise Business Plan Template [Updated 2024]

Business Plan for Franchises

Franchise businesses are great in that they have much higher success rates than starting a business from scratch.

If you want to start a franchise or expand your current one, you need a business plan.

The following business plan template gives you the key elements to include in a winning plan for your franchise business. It can be used to create a franchise restaurant business plan, a store franchise business plan, a startup business franchise or any other type of franchise business plan. In addition to this template, all franchise business plans should also include market research to help support the business opportunity and help craft your marketing plan and financial projections.

You can download the franchise business plan template (including a full, customizable financial model) to your computer here.

Below are links to each of the key sections of a business plan to help you with how to create a franchise business plan: I. Executive Summary II. Company Overview III. Industry Analysis IV. Customer Analysis V. Competitive Analysis VI. Marketing Plan VII. Operations Plan VIII. Management Team IX. Financial Plan Click below to see each section of our free franchise business plan template. You can also click here to get our franchise business plan sample pdf .

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Franchise Business Plan Outline

The 7 Key Elements Of An Effective Franchise Business Plan

• Adam Goldman
• May 12, 2020

Whether you are purchasing a franchise business or expanding your current one, finances will always play a major role. To secure financing from lenders, it is necessary to prepare a franchise business plan .

However, it’s essential to have a solid understanding of the seven key elements in order to create effective franchise business plans.

A franchise business plan is not only a written document that narrates the core details of your independent business but also has a list of your objectives. It also includes the operations, the marketing strategy for growing your business, as well as the financial projections, including franchise fees. It’s crucial to address any pending request, ensuring a smooth and transparent process in the development and execution of your franchise strategy in your business plan.

For you to learn more, this post will discuss each of the seven elements needed when writing franchise business plans. So even without a business degree, you can write a convincing one.

Next Section, let’s get started by knowing these 7 franchise business plan elements.

What are the 7 Elements of a Successful Franchise Business Plan

After signing the franchise agreement , your franchisor will give you the marketing plan and other start-up information . The materials provided to you can help you start writing your franchise business plan outline. In many cases, franchisors will guide their franchisees in the writing process.

Next section, when you create a concise franchise business plan template could lead to getting a financial source to start a franchise or grow your existing franchise. So, let’s begin by knowing the elements you’ll need.

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1. franchise business plan: executive summary.

• Which service, product, or need, does your business serve?
• Is your business unique?
• How will you ensure your company’s success?
• Is your personal savings enough to invest a business?
• What skills do you possess that will help the business excel?

The first part of your franchise business plan outline is the overview or summary of the essential information you are providing in your new franchise business or current one.

As it will explain your business, the executive summary section should answer the following questions about your franchises:

Business plans’ executive summary is the readers’ first impression of your franchises. It is a written version of your business pitch. It should clearly define your franchises and everything it has to offer in a way that distinguishes your concept.

The executive summary should read as a separate document to introduce your business plan template. It should only reference material that you’ve provided and use appropriate language for your target audience.

2. Franchise Business Plan: Business Description

The business description section of the franchise business plan template summarizes your business. This section should contain your:

• company’s structure,
• mission statement,
• and future projections.

While you don’t need to provide detailed financial data, you should include an overview of your industry, financial projections, personal savings, tax returns, and relevant business facts in your business plan.

Next section, you should include company goals in the business description of your franchise business plan. The business description is your opportunity to share short and long-term objectives for your business with your reader.

Make sure your business goals are reasonable and quantifiable . Learn from other franchisees, and avoid ambiguous terms on your franchise business plan template. Use specific language and time frames to precisely explain what you plan to achieve.

3 . Franchise Business Plan: Competitive Analysis

A competitive analysis section is also included in any franchise business plans. It involves determining your competitors, both direct and indirect, and your deep research will help you understand your weaknesses and strengths vs. them.

To have a handful analysis of your competitors in the business in your business plan, you need to do the following:

• Select ten direct and indirect competitors to compare.
• Conduct research about their marketing efforts and product features.
• Then compare the gathered details to yours.

Gaining an understanding of your competitors through your competitive analysis helps you develop an effective strategy for the success of your franchise business plan and helps you get potential funders.

4 . Marketing Plan and Sales Plan

This section of your franchise business plan highlights your business’s strategy for building and maintaining a customer base and demand for your business. Thoroughly explain how you plan to advertise, your current advertising, and the research behind your strategy.

Next section, you can use the information from the required franchise training, which is the detailed information stated in Item 11 of the FDD or Franchise Disclosure Document .

So how to write a marketing plan and sales plan or your franchise business plan outline? Here are some steps to follow when creating these plans:

1. Define your target audience

Perform a market analysis to identify the specific demographic or customer segment that you should focus on with your marketing and sales plans. This will help you tailor your messaging and tactics to appeal to your ideal customer in your business plan.

2. Set marketing goals

Establish specific, measurable marketing goals that align with your franchise business plan template objectives. For example, you might set a goal to increase website traffic by a certain percentage or generate a certain number of leads through a marketing campaign.

3. Develop a marketing strategy

Outline the tactics you’ll use in your business plan to reach your target audience and achieve your marketing goals. This might include digital marketing, social media advertising, email marketing, content marketing, or other tactics.

4. Create a sales strategy

Determine how you’ll sell your franchise product or service to your target audience in your business plan. This includes setting up a sales team, developing a sales process, or leveraging existing relationships to generate leads. 

5. Identify key performance indicators (KPIs)

Define the metrics you’ll use in your business plan to measure the success of your marketing and sales efforts. This includes metrics such as conversion rates, cost per lead, or revenue generated from marketing campaigns.

6. Set a budget

Determine the personal savings you’ll need or plan to execute for the marketing and sales of your franchise businesses in your business plan. This might include allocating funds for advertising, marketing technology, or sales personnel.

Take the time to develop a thoughtful and comprehensive franchise business plan template that reflects your unique business and target audience.

5. Franchise Business Plan: Operations and Management

The operation and management section of your franchise business plan template focuses on the daily operations and activities of your existing franchise businesses. 

It encompasses not only the core business operations but also highlights the specific responsibilities and tasks, with a particular emphasis on your role as the owner in your business plan.

As you consider the ownership structure for this venture in your business plan, it is important to determine whether it will be a sole proprietorship with you as the sole owner, or if there will be multiple owners involved.

This section of your franchise business plan also includes the company’s staffing, logistics, and solutions to potential problems that could occur in the operation of your business. To know further details about your obligation as manager of your franchise businesses, Item 15 of the FDD will explain more.

6 . Financial Plan

The financial data portion of your franchise business plan should reflect and expand upon any facts. Also, the figures previously mentioned in your business plan template, including your executive summary. This section provides:

• hard numbers for your business costs, including your franchise fees, initial costs, etc.
• current funding,
• and expected funding necessary in the future.

To obtain more information when starting a franchise business plan template with a franchisor, you may refer to the Franchise Disclosure Document ( FDD ).

7. Franchise Business Plan: Pro Forma

The  pro forma is similar to the financial data section. But this part of the franchise business plan template focuses more on the three main accounting statements, which are:

• the balance sheet
• the cash flow
• and the profit or loss

You can create your pro forma in four steps in your business plan:

1. Create a chart of accounts.

2. Calculate your business projected earnings.

3. Create financial projections

4. Estimate cash flows

Consider speaking with the right person, such as an accountant or financial advisor to verify your estimates and validate your proposal to lenders.

Keep your Franchise Business Plan Updated!

Keeping franchise business plans updated is essential to ensure that they remain relevant and effective in guiding your franchise businesses’ growth and success.

Here are some steps to help you keep your franchise business plan up to date:

Regularly Review Financial Performance

Continuously monitor and analyze your franchise businesses’ financial performance. Compare actual financial results with the projections outlined in your business plan. Identify any discrepancies and assess the reasons behind them. Adjust your financial projection and strategy accordingly.

Customer Feedback and Market Research

Collect and analyze customer feedback through surveys, reviews, and direct interactions in your business plan. Use this feedback to improve franchise businesses’ products, services, and customer experience. Incorporate the insights gained from market research into your business plan to refine your strategies.

Assess and Adapt Marketing Strategies

Review your marketing and advertising strategies regularly in your business plan. Evaluate the effectiveness of different marketing channels and campaigns. Adjust your marketing plan based on what is working best to reach your target audience and achieve your goals.

Evaluate Operational Efficiency

Continuously assess your franchise’s operational processes and efficiency. Look for ways to streamline operations, reduce costs, and improve productivity. Update your operations plan in the franchise business plan to reflect any changes or enhancements.

Revisit and Revise Goals

Periodically review and reassess your short-term and long-term goals. Are they still aligned with your vision for the franchise? Adjust your goals as necessary and update your business plan with these revisions.

Seek Professional Assistance

Consider working with a franchise consultant or business advisor who specializes in franchise operations. They can provide expert insights and help you update your business plan outline effectively.

In conclusion, beyond relying solely on your personal savings, there exist multiple avenues to secure funding, such as bank financing, Small Business Administration (SBA) loans, franchise fees, franchisor programs, and various lending sources in your business plan.

To furnish lenders with a comprehensive understanding of both yourself and the franchise opportunity you aim to finance in your business plan, it is imperative to include essential elements such as management resumes, tax returns, media clippings, and other pertinent documentation.

By addressing these requirements proactively of your franchise business plan , you can expedite the financing process, minimizing delays in launching your franchise.

It’s worth noting that many franchisors mandate prospective franchisees to submit a franchise-specific business plan template as part of their application process. Therefore, it is advisable to ensure your plan aligns seamlessly with their stipulated requirements and guidelines.

To learn more about franchise businesses, talk to a franchise consultant .

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Franchise Business Plan

What is your initial plan when you have just franchised a business? Most people would find it absurd to immediately prepare a business plan for their franchise. Many would think that when you franchise, the franchisor would provide them the business plan apart from other elements necessary to operate the business. However, that is not the case. The task of creating a business plan for your franchise heavily falls on you. You have to note that developing a franchise business plan is not necessarily similar to the business plan of independent businesses.

• 9+ Business Plan Profit and Loss Template Examples
• 8+ Management Consulting Business Plan Examples

It is much simpler because, most likely, the franchisor can provide the answers to most of the questions that your business plan is seeking to address. Hence, creating a franchise business plan does not really require tough brainstorming, planning, and preparation. Although you still need to be specific in your goals as a franchise, the franchisor can provide you the information regarding your target market, the suitable location for your business, and many other basic information.You may also see  advertising and marketing business plan examples .

Franchise Marketing Plan Template

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Size: A4, US

Do not be too overwhelmed with the thought of creating a successful business plan and instead focus on what you can do and what you can ask from your franchisor. Moreover, the examples of franchise business plan displayed below can surely help you in your start-up.

Banking Franchise Business Plan Example

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Basics in Franchise Business Plan Example

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Company Franchise Business Plan Example

Franchise Definition

By the book, a franchise is a method of parceling out goods or service. It is a type of business where the franchisee agrees to pay certain fees as well as follow certain business franchise rules in order to acquire the right to sell the goods or services of the franchisor, the company who established the company. The franchisee can also benefit from its business methods, trade secrets, goodwill, professional training, as well as operating assistance.You may also see company plan examples .

Popular Franchises

As we all know, many people love franchising business because the franchisor does not need to do hands-on on the operations because it has a lot of franchisees who can do the actual selling. Although they can operate a business on their own, they do not bear the hassle of opening branches to the different parts of the world. In fact, it is the franchisee’s task to disseminate the business in different areas.You may also see  restaurant operational plan examples

On the other hand, it would be less bothersome for the franchisees to open up a business when they do franchising because they already have the basic requirements for a start-up from the franchisor. They only need to pay the fees, get some professional training, and adhere to the rules and immediately operate. The risk of losing is also low.You may also see  business proposal letter examples

Hence, no wonder why there are a lot of franchising businesses today which are evidenced by the following companies:

1. McDonald’s

3. Burger King

4. Pizza Hut

5. 7 Eleven

6. Marriott International

8. Dunkin’ Donuts

9. InterContinental Hotels and Resorts

10. SUBWAY®

11. Baskin-Robbins

12. Domino’s Pizza

13. Taco Bell

14. Ace Hardware Corporation

15. Jani-King Commercial Cleaning Services

16. Wyndham Hotels and Resorts

18. Carrefour

19. Europcar

20. Choice Hotels

Comprehensive Franchise Business Plan Example

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Detailed Franchise Business Plan Example

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Entrepreneurship Business Plan Example

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Elements of a Franchise

A franchise, for it to operate legally, consists of the following three elements: trademark, fee, and control or assistance.

Under the trademark of the franchisor, the franchisee must operate his business in providing goods or services. For example, when you are franchising Ace Hardware Corporation, you do not need to make your own company name as you are adopting the company name of the franchisor. Hence, in your operations, you must bear the name Ace Hardware Corporation.You may also see  restaurant strategic plan examples

There are certain franchise fees associated to the franchise which is a requirement and a condition for you to obtain the franchise and begin the operation. While the franchise fees are payment for the trademark and other benefits that a franchisee acquire from the franchisor, some franchisors would use the fee to aid in the start-up materials and tools of the franchisee.

Control or Assistance

Another element of a franchise is that, although the franchisee is running the business through his or her own operations, the franchisee is still subject to various requirements that are imposed by the franchisor. These include requirements regarding the location of the business, the design of the site as well as the appearance of the store, hours of operation, sales methods, marketing, as well as management systems.You may also see  business plan guidelines examples

Key Considerations

If you are still new to franchise, you need to know and understand the basics in franchising for you to easily perform franchising operations. There are some points to consider when you are in a franchise business, and these are as follows:

1. Business Suitability

One of the critical factors that you must consider is the suitability of your business. This includes your personal aims, your objectives, as well as your ability and will to manage this type of business—franchising.

2. Benefits

Another thing that you must consider in franchising is the benefit that you can acquire from the franchise. Although most of the franchise have a low risk of not being profitable, there are some franchise that would provide you very less returns.You may also see  tutoring business plan examples

3. The Downside

You must also consider the downside of franchising. For the franchisor, he or she must carefully assess the franchisee regarding the ways they can be trained and controlled. For the franchisee, he or she must scrutinize the legitimacy of the business.

4. Franchisor’s Life

Know that if you are a franchisor, it is your responsibility to manage the initial period of the franchise as well as to train the franchisee. He or she must also ensure to keep the franchisee interested in their business through launching and introducing new products and services.You may also see  farm business plan examples

5. Corporate Image

Franchisees can benefit from a strong corporate image of the franchisor. The franchisor must be legal and registered, and if the franchisor has a trademark, it must be registered with the Patent Office.

6. Legal Agreement

There must be an agreement signed before the commencement of the franchise or start of the franchise operations. There must also be an agreement as to who will shoulder the legal costs, whether it may be the franchisor or the franchisee. For this, you might want to take a look at franchise agreements .

7. Financial Matters

Another important consideration is the financial aspect of the franchisor. The franchisee would normally expect that there is transparency in the financial statements of the franchisor and that the accounting records involve positive amounts.

The franchise products or services must be carefully tested in the market with a pilot franchise and an independent franchisee for a certain period of time, usually over a minimum of twelve months to ensure that the franchise is not a failure.You may also see risk plan examples .

9. Operating Areas

In order to find the optimum area of the franchise, where it is conducive to the target market, a research must be carried out to define a certain location that will support the business based on the number of people, number of households, number of businesses, number of cars, etc. You might also be interested in rental property business plan .

10. Franchise Package

The franchise must provide the franchisor the benefit of the franchise even at the commencement of the franchise through providing a package of a fair amount of initial stock, training, manuals, accounting system, and other necessities for a start-up. For reference, you can check out tech startup business plans .

11. Brand Security

As has been said above, the patent or trademark of the franchisor must be registered with the Patent Office. This will cover the protection for the business name and the logo of the business . This will also ensure the franchisee that the business he or she is into is not only credible but also safe and secured.

12. Company Structure

The structure of the company who serves as a franchisor must also be taken into consideration. This will enable the franchisee to understand more about the business that he or she is into.You may also see  convenience store business plan examples

Franchising Business Plan Fundamentals

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Sefa Franchise Business Plan Outline Checklist Example

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Short Franchise Business Plan Example

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Soup and Salad Franchise Restaurant Business Plan Example

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Sections of a Franchise Business Plan

If you have already started in your franchise, one of the first things that you must have is a business plan . Although you might think that the resources and basic provided by the franchisor is enough, well, it is really not. You must have your own business plan that will detail your plans as well as the detailed steps in achieving those plans.

In your business plan, you must include these important section for it to be comprehensive and detailed:

1. Operational Plan

In your operational plan , it must contain information demonstrating your understanding of the nature of the business, the products and services for sales, the systems and methods used in selling, as well as the processes engaged to operate the business.

Operational plan is important in order to demonstrate how the business is executed. Also include your ways in interacting the customers, the delivery of the products or services, the systems for communication, execution timetables, among others.

2. Marketing Plan

In this section of your business plan, you must illustrate the company’s blueprint in order to create interest not only in the company but also its products. Normally, the franchisor would provide you advertising materials for your marketing. However, you may also need to develop additional advertising materials that better suits in the area where you are doing business.

The importance of marketing plan is that it is used to map out how to engage the market and sustain customer flow. You must include in your marketing plan the description of your target market, the channels for communication, marketing strategies, and many other plans related to marketing.

3. Management Plan

In your management plan, you must include the management—the people who set the strategies, oversee and execute, allocate the resources, and make the decisions—as well as the company’s vision and philosophy. Normally, the franchisor already has this in their company documents, but you can contribute in enhancing and improving their management plan through creating your own relevant management plan. This is integrating your own vision for your franchise to the management plan that they have already created.

This is important because it provides evidence of competency and management systems. Hence, relevant sections from the franchise management manual, tactical positions, strategic principles, and prevailing business models must also be included in this section of your business plan.

4. Financial Plan

Your financial plan is your method of proving how your operations can make money in doing what it is supposed to do. You may include in your plan the financial successes of other franchises and of the franchisor’s own operations. This is to demonstrate your anticipated success in your franchise.

A financial plan is important in order to show the key elements of the company’s operation. Hence, it is recommended that you will include in your financial plan your operational budget, the funds that you need and expect to raise of borrow, as well as the anticipated costs and revenues in the form of projections.

If you are contemplating on venturing into franchise business, it is better that you start immediately and enjoy the benefits from your franchise. The earlier, the better. Remember, a franchising business provides lesser risk and you are assured of the return, especially when you are franchising a business that already established its name in the industry, for example, McDonald’s.You may also see lean business plan examples .

So what are you waiting for? Make the wise decision now, and use the examples of franchise business plan provided above to help you in your start-up. If you got to start some time, why not now?

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Home > Blog > Franchise Development > How to Write a Franchise Business Plan

How to Write a Franchise Business Plan

Entrepreneurs who have decided to franchise their business owing to its past success and ability to replicate the business idea will need to write a business plan for a franchise. In many cases, this business plan will share many similarities with business plans for start-ups. However, a fundamental difference is that a franchise business plan must cover two types of target audiences: prospective franchisees as well as their customers.

In a sense, this is what sets a franchise business plan apart from other business plans that may apply to sole proprietors, limited liability companies, partnerships and others. In this article, we explore what a franchise business plan is, why it is important for your franchise business and how to write a business plan for a franchise.

Table of contents:

What is a franchise business plan?

Why you need to create a business plan, why franchisors are looking for business plans from their franchisees, important elements you need to include in your franchise business plan, how to create a franchise business plan, concluding remarks.

A franchise business plan is a document that is prepared by the entrepreneur in question when they wish to franchise a business. This document is extensive and plays an essential role in the business’ future development.

A franchise business plan is a living document that will require input from management and team members and which will be adjusted over time to meet the goals and aspirations of the business owner.

However, in short, a franchise business plan is a “roadmap” which methodically sets out how business objectives will be achieved. It can be used both internally and externally.

Internally, it can be used by management teams to check whether the business is on track with its predetermined objectives.

Externally, it is presented to lenders for financial assistance. Such lenders will then evaluate the depth, complexity and potential for profitability and returns of the business in question. They will then decide whether or not to award a prospective franchisor the necessary capital to proceed with the next step towards franchising their business and the likelihood and time frame for such capital to be repaid.

As a “roadmap” to a franchise business’ future structure, operations, organisational team, marketing strategy , financial projections and more, the importance of a business plan cannot be overstated.

There are several crucial reasons that you should consider when it comes to the question: why write a business plan in the first place?

Here are some of them:

• Clarify and evaluate your franchise business idea from multiple angles for more certainty and higher chances of success.
• Helps with goal setting and expansion/growth plans including sales, marketing and business operations.
• Enables you to identify potential problems that could arise and how you can circumvent them.
• It acts as a way of tracking your progress.
• Gives you more clarity about your financial needs and the projected financial returns you can expect.
• Assists with strategic planning over the short, medium and long term as it involves detailed research into a wide number of stakeholders.
• Communicates your vision to prospective employees and investors, giving them more confidence in your franchise venture.
• Attract funding from investors, banks and lenders.

When a franchisee expresses interest in a franchise opportunity , franchisors may require that these franchisees prepare a business plan.

This business plan is presented to lenders to enable them to assess whether the prospective franchisee is as thoroughly prepared for the business journey ahead to make it as successful as possible.

The primary purpose of determining this is through a detailed business plan that sets out the franchisee’s organisational structure, operations, market research, marketing plans, financial projections and more.

Whereas a franchisor can often offer help to a franchisee in developing their business plan, financial projections are typically not included by the franchisor because this could have important legal ramifications.

A further reason why a franchisor requires a business plan from their franchisees is to determine whether the franchisee is able to handle and abide by the franchise business model whilst serving the franchisor’s customers in a manner that ensures consistency across the brand.

Your franchise business plan should contain several important elements. Although these may differ from one franchisor to the next, some of the sections are standard and uniform across the board.

These may include:

• An executive summary: this is the first page of the franchise business plan and contains a concise summary of everything that is contained in the remainder of the document. As such, it is usually written last. It can be divided into three sections: a business summary, business aims and a financial summary.
• Company description: the company description contains information about the type of business in question, who it is led by, the background, education and previous experience of the owner and what value they bring to the business.
• Mission and vision statement : the mission statement is generally expressed as a sentiment that is about one sentence long. It indicates what purpose the business seeks to achieve. The vision statement on the other hand is what the business’ meaning and purpose is for each of your stakeholders.
• Business structure : since your focus is on creating a franchise business, the business structure to be clarified here is a franchise business.
• Products and services : other aspects that need to be clarified are what products and/or services your business will be providing to its customers. If you are offering a variety of these, consider grouping similar ones together and describing them briefly. If you are only going to offer one product/service or a handful, you can spend more time describing each one in detail.
• Industry analysis : studying the industry in which your franchise business will operate is also important to show lenders that your business idea is viable and replicable. Industry analysis will start with what other companies (i.e. your competitors) are offering the market, what prices they are asking for their products/services, where they are located and how you plan to strategically position your franchise business so that you outperform them.
• Market analysis : as part of the market analysis, you will need to conduct customer segmentation. This will necessarily involve identifying your target market and their needs as well as determining strategies of reaching them and winning them over to your franchise product or service offering.
• Logistics and operations: logistics and operations refer to the actual production or service delivery activities that you will be carrying out, how you will do so, at what cost, where and when, as well as how frequently these logistical aspects will need to be employed.
• Marketing plan: a detailed marketing plan is created after conducting market research and analysis. The plan will contain the strategy through which customers will be marketed to in terms of new promotions/discounts, special offers, company news, raising brand awareness, boosting sales, measuring key performance indicators (KPIs), refining the strategy and measuring its success.
• Franchise Marketing Plan Download
• Business management and organisational structure: this section will contain details of the leadership and management of your franchise business as well as a brief outline of what skills, knowledge and experience each person brings to the table.
• Financing projections/financial plan: this is possibly the hardest but most important section to prepare because it will undertake number crunching, forecasting and analysis.
• Appendix: use the appendix to attach any relevant documents to support any preceding section of your franchise business plan.

Knowing more about the various elements that go into a franchise business plan, you can now proceed. Below are some steps to follow in the process of how to write a business plan for a franchise.

Step 1: Present your business and your business idea

Since you already have a successful business behind you and you are seeking to branch out into franchising, you need to indicate why your idea can be replicated successfully in different territories.

Talk about the history of the business, the ownership structure, when it started trading and its progress to date.

Discuss your products and/or services mentioning what sets them apart and what benefits they offer. Are you planning on introducing an entirely new concept to the industry? Are there any disadvantages that you foresee and how will you deal with these?

Step 2: Highlight the key features of the industry

Mention any industry regulations that must be abided by, what types of companies dominate the industry and who the major players are, what key features of the industry need to be known, etc.

Step 3: Specify your target market and competitors

Your target market and competitors should be clearly identified as should the market in which you will be operating.

Target markets and ideal customer personas should be identified including their key demographic information and what influences their purchasing decisions.

Clarify what size of market share you aim to acquire and the steps for doing so.

Outline your primary competitors. Pay special attention to emphasising what their advantages and disadvantages are compared to your franchise business offering.

It’s important to never openly criticise your competition. Instead, approach any references to them with due respect.

Step 4: Outline your marketing and sales strategy

What price will you charge for your products or services – low, mid-range or high? What is the unique selling point that you will seek to emphasise? Do your products or services have unique features and how will these be set apart from competitors? Which marketing channels or combinations thereof will you use? What are your monthly, quarterly and annual sales KPIs and how will your marketing strategy help you reach these?

What will your marketing budget be? What measures will you put in place to test, refine and measure the success of your marketing and sales efforts? How will sales be conducted – online, over the phone, or over the counter at a retail outlet? What is your anticipated cost per acquisition? How will you seek to reduce this? How will you differentiate between marketing for franchisees and marketing for your customers?

Step 5: Note your organisational structure and staffing needs

Who will sit on your management team and what skill set do they bring to the table? Who will be responsible for what department in your franchise business?

How many staff members will you start out with? What will their key roles and responsibilities be? How much will it cost you to retain your staff on a monthly basis?

Also important is the recruitment of franchisees. Will you have a dedicated team to train and support these and what kind of support will you offer? What will be the defining characteristics of your franchise offering and unique selling points?

Step 6: Clarify the intricacies of your business operations

Where will the franchise business headquarters be located? In which territories will future franchisees operate? How will the division of territories be undertaken (if any)?

Do you make use of production facilities? If so, how will you streamline your logistics processes to ensure that your franchisees benefit from these operations?

Will you need to make new investments in equipment? How is your existing infrastructure able to support future growth and further expansion?

What are the relationships with your suppliers like and who are they? What sort of pricing structure can they offer your future franchisees to enable them to optimise their investment?

Step 7: Prepare your financial forecasts

Start out by presenting your sales, income, turnover, profit and other historical figures to provide proof of your current business’ success before you turn to franchising. Going back between three to five years should be sufficient.

What is the gross margin on each product? How does capital flow in your business in terms of stock, debtors, creditors, etc.

What major financial investments have you made and what have been the results of these? Offer an updated balance sheet including a profit and loss account. Provide comparisons with industry norms.

Once the historical aspect has been taken care of, it’s also advisable to create forecasts for the next few years. If you make any assumptions for any of your forecasts, each of these should be explained and supported in full.

How realistic are your forecasts? Never try to inflate projected income, sales, profit, turnover or other amounts. Be as realistic as possible. Factor into account that payment delays may occur. How do you plan on dealing with these?

Specify the type and amount of financing you are looking for. Is it a medium- or long-term loan or an increased overdraft facility? What interest rates and instalment amounts can you afford to pay over the loan period?

Franchising your business will require a franchise business plan to put your goals into perspective and to help lenders back your business idea. And although it can be quite a detailed process, there are several key steps you can take to prepare a thorough and detailed business plan to convince lenders to support your franchise business.

In the beginning of the journey to franchising, many franchisors struggle to implement effective strategies and plans to set them up for success. But there is help at hand. Join our How to Grow Your Franchise Sustainably Without Costing Your Personal Life masterclass to find out about how the 5Fs Franchising Model has been implemented successfully across multiple global franchises and how you can achieve a greater work-life balance by prioritising better and making the most of your existing infrastructure and network.

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Creating a business plan for your franchise: what to prepare before asking for money.

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Congratulations! You’ve decided that owning a franchise is the right investment for you. You may have even already decided on the type of franchise, and maybe even the franchise brand you are going to pursue.

What’s next? Financing. Securing the funding needed to make your franchise dreams a reality. And unless you are one of the fortunate people that has enough money saved to cover costs, you will likely be seeking a lender to make up the difference between the amount of money you currently have to invest and amount of money needed to open and maintain your franchised business until you 'break even.' (Breaking even is the point in the lifespan of a business where the operation starts turning a profit.)

To convince lenders that you are worthy of their money, the creation of a business plan is crucial. Lenders use a business plan as a guide to assess whether the prospective franchisee is a on a path towards success and profitability.

To approve loans, lenders want to have a clear, straightforward account of the business to be opened, the principals involved, and—perhaps most importantly—perspective on when the borrowed money will likely be repaid.

It's helpful to prepare for the meeting with the lender like a college graduate student would prepare for a thesis defense presentation. In both instances, it is the goal of the person (or people) going into the meeting to have done the adequate level of research necessary to competently back up the stated claims for the desired result (be it the granting of a master's degree to the student or the gaining of a loan for the prospective franchisee).

Important note: the business plan isn’t just for getting money.

Not only does a business plan help in securing funding, it forces you to take a hard look at the investment you are about to make. It gives you a chance to anticipate the challenges that come with opening a business, and temper unrealistic expectations.

As time passes and you move further into franchise ownership, the business plan you’ve created should be updated and utilized as a guide in helping you reach your franchise goals.

Parts of a Business Plan

Creating a business plan doesn't have to be complicated.

There is no standardized length for a business plan, but no lender wants to read a novel-length presentation. The main thing is that the plan is thorough enough to cover all aspects of your individual franchise. You want to give the lender confidence that you are prepared to take on the managing of a business that will turn a profit in a reasonable amount of time.

The key is compiling the proper information to address the reservations of the lenders you will meet with. This is where opening a franchised business offers a notable advantage over an independent business.

The franchise disclosure document (FDD) provided by the franchisor of the system you are investing in contains a great deal of the information needed to complete a business plan.

This information includes the company’s corporate background, a description of the target market, the competitive advantage of the product/service, marketing initiatives, plus the start-up and ongoing costs. Some franchisors even offer assistance to franchisees in the preparation of the plan.

Common parts of a business plan include the following, according to the Small Business Administration  (a sample business plan is located at the end of this article):

Company description: A good place to look for the information for this section is Item 1 of the FDD. Provide an overview of the franchise and its history to the lender. You will also provide a brief outline of the franchise’s service/product (more detailed information will be given in the next section).

Service/product description: Describe in detail the service and/or product your franchise will provide to customers. This section can be combined with the company description. Again, Item 1 of the FDD is where you will find much of the information you need for this section. Item 16 will also be helpful in discussing what you will and will not be able to sell as a franchisee of a particular franchise system.

Market analysis: Use this section to prove to the potential lender that you are not jumping into a business venture on a whim. Concentrate on the specific area (market) in which the franchised business will be located. The territory description in the FDD (Item 12) will help you to a point.

Give a brief discussion of the following:

• How big is your market?
• What kind of people (demographically and financially) make up this market?
• Is the market under-served in regards to this service/product?
• If there is competition, who are your competitors and what is your competitive advantage?
• Discuss what experts are forecasting for the service/product in terms of trends and growth possibilities for your specific market (can include demographic, legislative or environmental factors).

Management structure: This section provides a look at the people who will be responsible for the day-to-day operation of the franchise, particularly you as the owner. Is this venture going to be a sole proprietorship or will there be multiple owners? Explain if you will be involved day-to-day with business operations, or will be acting as an absentee owner.

For yourself and all of the others with an ownership stake, if applicable, detail all business qualifications. Stress any and all experience (even if volunteer) that is relevant to being successful in the future with the franchise operation. Item 15 of the FDD will help with explaining the managerial obligations of the franchisee.

Marketing plan: 'How are you going to get customers?' is the main question you’re answering in this section. Use FDD Item 11 to your advantage here. It provides an overview of the franchisor’s advertising and marketing efforts. Also, it provides a description of the training you will complete before opening. Often marketing and sales courses are part of required training.

Financials: This is the meat of your business plan. In this section, don’t only ask for the money you need. Give the lender the big picture of your financial situation as well. Detail how you are going to obtain the entire initial investment. Often times, a lender will not be financing all of the franchise investment. Are you using a mix of personal savings, loans, credit, etc.?

In addition to the funding request, you will be doing some financial projection. Give a reasonable time frame when the lender can expect full repayment of the loan, and back up that claim with figures. Include graphs and charts detailing the start-up costs, projected profit and loss and projected sales forecast for the franchise.

The franchisor can be of significant help to you in completing this section (via Items 5 and 19 of the FDD, and in direct conversation). However, keep in mind the franchisor is restricted legally about making certain claims about projected earnings. Be conservative with the projections as unexpected delays and unforeseen circumstances do happen.

Appendix: The appendix technically isn’t a part of the business plan, but an additional section to present items that would enhance your presentation. Include items you feel would be necessary to giving the lender a complete picture of you and the franchise you are seeking financing for. Examples include: the resumes of management figures, tax returns, media clippings, etc.

As previously mentioned, the best outside source of information to complete your business plan is the franchisor. No other outlet is going to know that franchise system better. 

Additional resources include online sites such as Bplans.com, which offers site visitors a substantial library of sample plans to review, as well as general business websites like the Small Business Administration. Prospective franchisees can also use a professional business plan writer, particularly for the review of a plan before sitting down with the lender.

Confidentiality agreement: Because business plans contain sensitive and confidential information, the content needs to be safeguarded against potential leaks. To do this, you will need to enter into a confidentiality agreement with the parties you allow to review your business plan.

The agreement will bind them not to disclose or reveal any confidential information they receive, without your written permission.

Sample Business Plan Confidentiality Agreement Template

Sample franchise business plan: Please note that the example business plan linked below is a sample of one way to format a business plan. There are several different acceptable formats, and the contents of business plan sections will vary significantly due to factors including the franchise system, the type and amount of loan sought, the franchisee’s background, etc.

Sample Business Plan

Suggested reading:

• The Ultimate Guide to Franchising
• What is Franchising?
• The Benefits of Franchising
• Choosing the Most Profitable Franchise for You
• 11 Key Steps in Opening a Franchise
• Franchises vs. Business Opportunities
• The Cost to Start a Franchise and Financing Options
• Basics of the Franchise Disclosure Document (FDD)
• Creating a Business Plan for Your Franchise
• Completing and Signing a Franchise Agreement

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Franchise Business Plan Template

Whether you want to start your own franchise business or expand an existing one, you need a business plan. the following franchise business plan template lets you know what elements you need to include in a successful franchise business plan., fill the form to download business plan templates.

To ensure your franchise business success in this highly competitive market, you need a properly structured franchise business plan. With over 12 years of experience, we have helped over 5,000 entrepreneurs create business plans to start and grow their franchise businesses. Using the following franchise business plan template, you can put together an effective business plan.

Things to Know Before Writing a Franchise Business Plan

The franchise business industry has two primary agents; franchisor and franchisee. A franchisor is the business system/brand owner, and a franchisee is an entity that rents the business system/brand name against a fixed initial fee and royalty. 

A franchise business plan is popular in many industries. Popular franchise systems are fast food chains like McDonald’s, KFC, Subway, etc. You can find a franchise opportunities in many industries. 

A franchisee operates a business location under the guidelines of the franchisor. You have little freedom to experiment with new things. 

The FDD, or Franchise Disclosure Document, is the legal contract between a franchisor and a franchisee. FDD has details of the rights and responsibilities of the two parties. This is generally a lengthy document. You need to understand it before you buy a franchise. 

The franchise industry is growing fast. As International Franchise Association (IFA) reports, 2022 is the year of opportunity for franchises. 

The estimated number of total franchises in 2021 was 774,965 with a total number of employees at 8,192,600, and an output of $787.7 billion. 

The total GDP size of the franchise economy in 2021 was $474.2 billion. The growth projections for franchises in 2022 stand at 2.2%. 

These are the top industries with the most number of franchises. 

• Quick Service Restaurants (188,402 franchises)
• Retail Food, Products, and Services (162,579 franchises)
• Personal Services (114,012 franchises)
• Business Services (99,296 franchises)
• Commercial & Residential Services (75,678 franchises)

Key Success Factors for Franchise Business

A franchise business has different dynamics as you are selling an established brand to a market with a demand for that brand’s products or services. 

We have identified these five factors that play a crucial role in making a franchise successful. 

• A Loyal Customer Base for the franchisor brand makes sure you’ll have enough demand to successfully run your franchise business 
• A Clear Market Position . This means that you are selling products where there is a need and where the brand fulfills that need. 
• Franchisor Business Operating Expertise : When a franchisor has business expertise, chances are they will better lead the industry and develop the market for the brand 
• Established Brand Name : Running a McDonald’s franchise is far more profiting than a Huddle House
• Ability to Control Stock: When franchisees can control stock locally, they can meet increased demand, control costs, and reduce waste. 

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What is a Franchise Business Plan?

A franchise business plan is a roadmap for starting and growing your franchise business. Your business plan outlines your business concept, identifies your target customers, presents your marketing strategy, and details your financial projections.

Any bank or investor you approach will require a franchise business plan, so putting one together will be critical to securing funding.

In short, writing a business plan can help you succeed if you’re thinking of starting a franchise business or pitching to investors or venture capitalists.

Why You Need a Franchise Business Plan

Franchise business plans can be used to gain interest from potential investors or to secure loans from banks. They are also helpful to you as the owner. A franchise business plan allows you to thoroughly analyze every aspect of your potential business.

A solid, detailed plan gives you a clear path to follow, forces you to examine the viability of a franchise business idea, and may help you better understand your company’s finances and competition.

A franchise business with a plan grows 30% faster than the rest. On the other side, if we look at the fast-growing companies, 71% of them have a business plan .

A franchise business plan is a living document that should be updated annually as your company grows and changes.

Free: Franchise Business Plan Examples

Do you need help creating a franchise business plan? Check out these six free, proven franchise business plan examples from different industries to help you write your own.

Funding Sources for Franchise Business

Conventional Banks and Credit Unions

You can get a loan from banks, credit unions, or other financial institutions. Getting such a loan for a franchise business depends on many factors including turnover, credit history, and expected revenue of the business. 

SBA regularly offers loans, grants, and lifelines for small businesses. Keep an eye on the 7(a) program that is aimed at small businesses in the early stages. 

Business Partners 

A franchise business is a high investment business. Consider adding business partners to create a money pool big enough for the business needs.

Retirement Funds 

If you have retirement funds available, you can use retirement funds or 401k for starting a franchise. 

Securities-Backed Line of Credit

if you have an investment portfolio, you can get a line of credit against those securities. These securities will serve as loan collateral. 

Equipment, Machinery, and Furniture Lease

You can get franchise machinery, vehicles, computers, furniture, and other equipment at lease. If you get an equipment lease, you may also get a buyout for $1 when the lease term ends. 

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A franchise business’ success is partially determined by its supply chain. We can help you purchase goods and services on Net 30 terms. Create a net 30 account with us and start building your business credit. 

How to Write a Franchise Business Plan

To write a franchise business plan, you don’t need to be an expert. Our step-by-step guide will show you how to write a franchise business plan, or you can just download our proven  sample business plans  to get a better idea.

Free Franchise Business Plan Template in PDF and Word

Download our franchise business plan template in PDF and Word here.

Executive Summary

The executive summary is the most important part of the document since it outlines the whole business plan. Despite the fact that it appears first in the plan, write the executive summary last so you may condense key concepts from the other nine parts.

It’s a part that catches the investor’s eye and provides key information about your company’s overview and upcoming short- and long-term goals.

Tell them what kind of franchise business you have and what stage you’re in; for example, are you a startup, do you have a franchise already that you want to expand, or do you have a lot of franchise businesses?

Finally, an executive summary should provide investors with a preview of what they may expect from the rest of your document.

• Provide a high-level overview of the franchise industry
• The name, location, and mission of your franchise company
• A description of your franchise business, including management, advisors, and a brief history
• Discuss the type of franchise business you are operating, Give an overview of your target customers., and how your company differs from competitors in the industry
• Create a marketing plan that describes your company’s marketing strategies, sales, and partnership plans.
• And give an overview of your financial plan

Check out these executive summary examples to help you write a perfect one for your franchise business plan.

Free: Franchise Business Plan Executive Summary Examples

An executive summary is the most important part of your franchise business plan, and it need not be challenging to write. This is why we have put together some awesome free Executive Summary examples for you.

Company Analysis

• Company summary: Your company analysis will describe the type of franchise business you are running and its future goals. The type of franchise business you might be focused on  (for example,  Quick Service Restaurants, Retail Food, Products, and Services, Personal Services, Business Services, or Commercial & Residential Services)
• Company history: When and why did you start your franchise business?
• What milestones have you achieved so far? Your milestones could include served 100th customer, new fleet purchase, etc.
• Legal structure and ownership: Do you have S-Corp status? Is it an LLC ? A sole proprietorship ? Describe your legal structure.
• Mission statement: An overview of your franchise company’s guiding principles. Learn how to write a perfect mission statement .

Industry Analysis

The franchise business plan’s research section will most likely be the most time-consuming. Here, you will elaborate on how you will fit into the existing franchise market.

Since your research findings should serve as a sound confirmation of the conclusions you have outlined thus far, they will demonstrate your understanding of the industry and market.

Industry analysis can be presented as a 8-step process when written as part of a company’s business plan.

• Give a quick overview of the franchise industry. Define the franchise business in terms of size (in dollars), historical background, service region, and products.
• Examine previous trends and growth patterns in the franchise industry.
• Identify the market’s major competitors.
• Age, gender, and general lifestyle of the targeted market
• Determine the factors that have an impact on the franchise industry. These might include government regulatory rules and other businesses’ competitive activities.
• Using research data, the industry forecast expected growth over the next five to ten years. Predictions should be made for both the long and short term.
• Describe how your franchise business intends to position itself in the industry. Concentrate on how your franchise business can benefit from opportunities highlighted in the industry.

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Customer Analysis

The first condition for franchise business is to identify its target customers clearly. Different franchise business have different customers. 

The customer analysis section is an important part of any franchise business plan since it evaluates the consumer segments that your company serves. It identifies target customers, determines what those customers want, and then explains how your franchise items will meet those requirements.

Customer analysis may be divided into two parts: psychosocial profiles (why your franchise items suits a customer’s lifestyle) and demographic profiles (descriptions of a customer’s demographic qualities).

With regards to demographics, include information about the ages, genders, locations, and income levels of your customers. When targeting businesses, describe what kind of business, size, and location your target customers have.

The psychological profiles of your target clients reveal their wants and needs. The better you understand and identify these demands, the better you can attract and retain customers. 

Competitor Analysis

It is necessary to do a competitor analysis. Because you may use their data to define your goals, marketing plans, tactics, new product lines, pricing, and more. Use competitor analysis to:

• Identify the strength and weakness of your franchise business competition.
• Search for opportunities to distinguish your franchise from competitors.

The first step is to determine who your direct and indirect competitors are.

The direct competition consists of other franchise businesses that offer the same goods or services to the same audience. 

Your indirect competitors are other options that customers have to purchase from you that aren’t direct competitors.

Among indirect competitors are the business selling similar product or service. For example, if you have McDonalds’ franchise, someone selling Chinese or Italian food is your indirect competitor. 

Once you’ve identified the competition, concentrate on the direct, head-to-head competitors, since they are the most threatening to your franchise business— but keep an eye on the indirect competition as well, just in case.

Provide an overview of each direct competitor’s business and detail their strengths and weaknesses.

You will be able to position yourself competitively in the market if you perform proper competition research. Perform a SWOT Analysis to learn your competitors’ strengths, weaknesses, and competitive advantages in the following areas:

• Prices – Are they offering cheaper products or services than you and other competitors, what value do buyers get for that price?
• Quality – Are they offering premium quality? What is the perceived worth in the eyes of the customers?
• Customer service – How they respond to their consumers, whether they treat them poorly or well, and the degrees of satisfaction customers show
• Reputation — The sum of everything mentioned above: their credibility, how loved the brand is, and the loyalty of their customers

The final section of your competitive analysis should include a list of your areas of competitive advantage. For example, how will you offer better value at competitive prices for the target market.

Consider how you will outperform your competitors and include them in this portion of your  franchise business plan.

Free: SWOT Analysis Examples

Take advantage of our free SWOT analysis examples. Make your business future-proof by identifying your strengths, weaknesses, opportunities, and threats using this free SWOT Analysis Template.

Marketing Plan

Creating a marketing plan for a franchise business involves identifying the target demographic and finding the goods and services that suit their preferences.

As part of your marketing plan for a franchise business, you should include:

Pricing and Product Strategy

Your franchise business must offer goods or products that are different from those of your competitors. Research what your competitors offer and how they price their offer. 

Placing and Promotions

Place explains the location you’ll chose for your franchise and the reasons of the selection.

Promoting your franchise business is the final part of your marketing plan. In this step, you document how you will drive customers to purchase your goods or services. A few marketing methods you could consider are:

• Marketing on social media
• Web Marketing
• Organize events
• Local Newspaper and TV ads
• Banners and Bill boards 
• Local Radio Ads 

You should also think about your franchise company’s Unique Selling Proposition (USP), which should explain why clients should choose you over other franchise businesses. Ensure that your USP is reflected in your marketing.

Pro Tips: Learn how to create a marketing plan in a business plan .

Operations Plan

While the previous sections of your franchise business plan described your goals, your operations plan discusses how you will achieve them.

An operations plan section in a business plan is helpful for investors, but it’s also helpful for you and employees because it pushes you to think about tactics and deadlines.

Your operational plan should be able to answer the following questions:

• Who – Personnel in charge of completing specific tasks.
• What – A breakdown of the responsibilities of each personnel.
• Where – The location of everyday operations.
• When –The deadlines for completing tasks and goals.
• How much – The amount of money required for each department to perform their job.

Your operations plan should be divided into two individual parts, as seen below.

Your daily short-term processes include all the tasks involved in producing goods or services, managing operations, selling, employee management, etc. 

Long-term goals are milestones you hope to reach. they might be growing your business, such as introducing new items or retail outlets, meeting particular sales milestones, and meeting other essential business-oriented goals like recruiting more staff, opening additional locations, and so on.

Management Team

When writing a franchise business plan, the management section of a business plan outlines your management team, staff, resources, and how your business ownership is structured.

This part may be easily organized by dividing it into the following points:

Ownership Structure

Internal Management Team

External Management Resources

Human Resources

This section outlines your franchise business’s legal structure. An LLC or a Corp is favored in the franchise business ecosystem. 

This section should not only outline who is on your management team but also how each person’s skill set and experiences will contribute to the growth of your franchise business. Ideally, you and/or your team members have direct expertise in the franchise business. If this is the case, highlight your experience and skills.

Think of these external management resources as your internal management team’s backup. Consider forming an advisory board if your team is lacking expertise and experience with franchise business.

An advisory board would consist of 3 to 7 people who would serve as mentors to your franchise business. They would help with strategic direction and strategy advice.

If necessary, search for advisory board members with expertise running franchise business.

Describe all of your company’s external professional advisers, such as accountants, bankers, attorneys, IT experts, business consultants, and/or business coaches. 

The final topic to consider in the management area of your franchise business plan is your human resource needs.

Financial Plan

As part of your financial plan in a business plan , you should present a 5-year financial statement broken down monthly or quarterly for the first year, and then annually. Financial statements include your income statement, balance sheet, and cash flow statement.

Income Statement

A profit and loss statement is more commonly called an income statement. It shows your revenue and subtracts your expenses to determine whether you were profitable or not.

As you develop your income statement, you need to develop assumptions. Will you serve 50 customers per day or 200? Will sales grow by 2% or 8% per year? Your choice of assumptions will greatly impact your business’s financial forecasts. Conduct as much research as possible in order to ground your assumptions in reality.

Free: Income Statement Template

Create a financial statement for your franchise business by downloading our free income statement templates.

Balance Sheet

While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities.

The balance sheet shows your franchise business’s net value at a specific point in time. It categorizes all of your company’s financial data into three categories:

• Assets: Tangible goods with the monetary worth that the company owns.
• Liabilities: Debt owing to a company’s creditor.
• Equity: The net difference when the total liabilities are subtracted from the total assets.

The equation that expresses the relationship between these financial data elements is Assets = Liabilities + Equity.

Create a pro forma balance sheet for your franchise business plan that highlights the information in the income statement and cash flow projections. A balance sheet is normally prepared once a year by a company.

Balance sheets indicate your assets and liabilities, and while they contain a lot of information, they are simplified to highlight the most important things you need to know.

For example, spending $500,000 to build out your franchise will not result in instant revenues. Rather, it is an asset that should help you earn money for many years to come.

Similarly, if a bank sends you a check for $200,000, you do not have to pay it back right now. Rather, that is a liability that you will repay over time.

Cash Flow Statement:

Your cash flow statement will help you determine how much money you need to start or grow your franchise business. In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a franchise business:

• Fees for registering a franchise business
• Taxes and licenses costs
• Business insurance
• Payroll or salaries paid to staff
• Facility rent and security deposits
• Construction / remodeling
• Start-up Inventory

Free: Balance Sheet Template

Create a financial statement for your business by downloading our free balance sheet templates.

List any additional material you cannot include elsewhere, such as resumes from key employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts, and personal and business credit histories.

Attach your full financial projections along with any supporting documents that make your plan more compelling in the appendix.

Bonus Tip: Learn what to include in a business plan appendix when writing a business plan.

Summary of the Franchise Business Plan

A franchise business plan is a worthwhile investment. As long as you follow the template above, you will become an expert in no time. By following the template, you will understand the franchise business, your competition, and your customers. The plan will help you understand the steps necessary to launch and grow your franchise business.

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Also, you can download our 300+ free business plan templates covering a wide range of industries.

OR, we can create your franchise business plan for you

Since 2010, Wise business plans’ MBA professional business plan writers has developed business plans for thousands of companies that have experienced tremendous success.

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We will show you some real-world business plan examples so you may know how to write your own, especially if you are seeking a bank loan or an outside investment and need to use SBA-approved formatting.

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Food Franchise Business Plan

If you are planning to start a new food franchise in your town, the first thing you will need is a business plan. Use our food franchise business plan example created using upmetrics business plan software to start writing your business plan in no time.

Before you start writing your business plan for your new food franchise business, spend as much time as you can reading through some examples of food and restaurant business plans .

Reading some sample business plans will give you a good idea of what you’re aiming for and also it will show you the different sections that different entrepreneurs include and the language they use to write about themselves and their business plans.

We have created this sample food franchise business plan for you to get a good idea about how a perfect food franchise business plan should look like and what details you will need to include in your stunning business plan.

Food Franchise Business Plan Outline

This is the standard food franchise business plan outline which will cover all important sections that you should include in your business plan.

• Introduction
• A BON Fide Enterprise
• Marginal Enterprise
• Irrevocable Commitment
• Doctors Associates, Inc.
• Company Values
• Business Model
• Keys to Success
• Summary Operating Forecast
• All Day Value — includes the famous $5 foot long and the $3 Six-Inch Select
• Featured Products
• All Sandwiches
• Fresh Fit Choices
• Fresh Fit For Kidz
• Sides, Drinks, Extras
• The Subway Old Cut
• The Subway PM Sub
• The WM Meer
• Demographic Trends
• Health Consciousness
• Convenience
• Lithe Rock, AR Demographics
• Operating Policies
• Operating Philosophy
• Strict Inventory Controls
• Purchasing Cost Controls
• Recipe a Portion Controls
• Sanitation a Food Handling
• Management’s Role
• Software a Systems
• Money a Profit Management
• Hiring the Best
• Training for Excellence
• Retaining the Best
• Staff Turnover / Training Costs
• Target Market
• Market Positioning a Branding
• National Advertising
• Local Marketing
• Grand Opening Budget
• Competitive Landscape
• Direct Competitors
• History and Structure
• Professional Services
• Tarek El Amarani
• Staffing a Compensation
• External Issues
• Pre-Ownership Expenses
• Revenue Assumptions
• Direct Costs
• Income Statement
• Balance Sheet
• Cash Flow Statement

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After getting started with Upmetrics , you can copy this food franchise business plan example into your business plan and modify the required information and download your food franchise business plan pdf and doc file. It’s the fastest and easiest way to start writing your business plan.

Download a sample food franchise business plan

Need help writing your business plan from scratch? Here you go;  download our free food franchise business plan pdf  to start.

It’s a modern business plan template specifically designed for your food franchise business. Use the example business plan as a guide for writing your own.

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Which Franchise Model is Right For You? Here's How to Choose. There are thousands of brands and concepts, but franchises generally fall under two business models: "brick-and-mortar" and "service-based." Which is the best choice for you?

By David Busker Edited by Kara McIntyre May 14, 2024

Key Takeaways

• If you're ready to buy a franchise, there are two business models to consider: brick-and-mortar and service-based.
• Deciding between the two may be hard, but it doesn't have to be.
• The investment cost, potential for scalability, location and other factors below will help you decide which one you should choose.

Opinions expressed by Entrepreneur contributors are their own.

A major decision potential business owners must make when considering a franchise is determining what type of business they should run. There are thousands of brands and concepts, but franchises generally fall under two business models: " brick-and-mortar " and " service-based ."

Think about a franchise you know. One that offers services that you use consistently. Is it a hair salon ? A fitness studio ? A lawn care company? A moving and junk removal service?

All of these are franchises, but in terms of a business model, the hair salon and fitness studio fall under one umbrella — location-based businesses with retail storefronts where the customer receives the service at a fixed-base location. Meanwhile, the lawn care company and moving service fall under another umbrella — service-based brands — which do not have a storefront or customer-facing real estate and the service is provided at the customer's location.

Here are some of the key differences between brick-and-mortar and service-based businesses, so you are more informed when choosing a franchise model .

Related: Considering franchise ownership? Get started now to find your personalized list of franchises that match your lifestyle, interests and budget.

1. Investment cost

Real estate is what usually drives franchising investment costs . The more real estate intensive, the greater the investment level. Location-based, brick-and-mortar franchises generally have higher initial investments. Building the retail space can be pricey. Picture a fitness studio — you need bikes and machines, but also a high-tech sound system, televisions, changing rooms, showers, etc. Not to mention the flooring and interior architecture.

On the other hand, a service-based brand doesn't necessarily require real estate (some may even operate from a home office ). Some service-based brands require storage space to house vehicles or equipment that are deployed at the customer's location. Less visible and lower-cost industrial spaces are ideal for these franchises. Typically, these spaces require few leasehold improvements compared to a customer-facing retail space.

So what can you expect the investment costs to be for each of these options for a single unit or territory? Although it isn't definitive (there are always exceptions), common ranges are:

• Brick-and-mortar: $250,000+
• Service-based brands: under $300,000

2. Ramp-up time

Ramp-up time goes hand-in-hand with investment costs. The time it takes to ramp up to a monthly positive cash flow and establish repeat business both indicate important benchmarks for any sustainable business. In terms of speed, service-based brands are more likely to ramp up quickly because of a lower investment cost upfront and lower fixed overhead costs. Let's consider a moving service brand . Once you have the equipment and employees in place, the month-over-month operation costs are more closely linked to revenue growth; thus, these models can often grow to cash flow more quickly.

Alternatively, a brick-and-mortar brand (like a salon ) will have high upfront investment costs (retail space, individual stations, chairs, mirrors, hair wash/dry stations, etc.) and will likely take time to establish a strong customer base in a particular community. However, they tend to have more repeat business and durable income streams over time.

Related: Find Out Which Brands Have Ranked on the Franchise 500 for Longest, Earning a Spot In our New 'Hall of Fame'

3. Scalability

Brick-and-mortar businesses are typically more scalable . Once you have a single successful franchise, it's easier to manage and build an empire by spreading costs over multiple locations. But remember, due to the costly initial investments, building costs will be similar each time you open a new location.

With a service-based brand, rather than building more physical locations , you can expand your territory and drive more penetration within your territories. While this isn't without additional costs (consider gas money, employees to keep up with demand, more frequent equipment maintenance, etc.), it requires incremental investments since your revenue justifies it and creates economies of scale. By purchasing additional territories in a service-based brand, you scale your revenue and income multiplier without the same proportional increase in capital investment.

4. Technology

One area that is relatively equal in terms of usefulness and accessibility is technology. In recent years, technology has transformed franchising. Specifically, repeatable but necessary tasks have been streamlined and simplified through technology. For brick-and-mortar brands, it's common to see customers scheduling services directly (hair appointments, fitness class bookings, etc.). For service-based brands, customers can book service calls, and employees can perform tasks in real-time to keep business moving, such as ordering parts, creating estimates, etc.

Related: This Pizza Chain Will Pay You to Become a Small Business Owner — No Money or Experience Required

5. Location risk

Location is key for brick-and-mortar franchise brands . It's often a balancing act of finding real estate that is within an acceptable price range and in a popular location that creates consistent repeat business. You will be offering services in a fixed location, so the further away you are from the customer, the less likely the customer will travel to your location. For example, a fitness studio needs to be convenient for customers to come to your location three to four times per week. The more frequently a customer would ideally like to visit your franchise, the higher density is needed for the same market radius.

For a service-based brand, location is not as important for overall success. Since you or your employees will be traveling to the customer's location, there is no site selection risk, and you are free to penetrate deeper into a market. However, it is worth noting that if you do expand to multiple territories, you may want to consider renting additional warehouse or storage space to optimize efficiency.

6. Recession resistance

Lastly, one factor to consider lies in the recession resistance of your franchise. Brick-and-mortar brands often offer more discretionary services. These are everyday services, to be sure — hair care, nail salon, etc. — but they are not always considered everyday essential services. On the other hand, service-based brands often are essential everyday services that must be performed despite fluctuating market trends — think HVAC , plumbing , yard care , or restoration.

At the end of the day, there is no one-size-fits-all franchise for every potential franchisee. But by understanding the basics of these umbrella categories, you can start to consider which business model type matches most closely with your business goals.

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How to Start a Franchise

9 min. read

Updated January 5, 2024

Franchising offers a pathway to business ownership that takes advantage of a proven idea and strong brand. You lose some autonomy and control—but get to work from an established playbook, learn from a successful franchisor, and, most notably not have to start a business from scratch .

So, is becoming a franchisee the best way to start a business? 

Learn how to choose and start a franchise that fits your interests.

• What is a franchise?

A franchise is a business owned by an individual (franchisee) but branded and supervised by a larger company (franchisor). Common examples include Subway, 7-11, and Hilton Hotels. 

Purchasing a franchise grants you the right to use a tested business model, pricing, products, and marketing strategies. 

Additionally, franchisees gain access to the company’s trademarked materials like logos and slogans—essential for establishing a brand identity.

• How to start a franchise

While you get to bypass idea creation , customer validation , and brand development —there are still critical steps unique and similar to starting any other business.

1. Know your budget

There is always an upfront franchise fee, and franchisors often have financial requirements for potential franchisees. For example, some franchisors require franchisees to have a particular net worth.

Review your finances and assets to look for opportunities in line with your price range. Determine how you’ll finance the franchise, whether through personal savings, bank loans, or franchisor financing options.

2. Do your research:

You don’t want to waste time dreaming up your plans to open a specific franchise only to look at the fine print and realize it’s not a good fit.

For example: A Cafe Yumm franchisee must have a net worth of $500,000. If that isn’t where you’re at financially, look elsewhere.

Contact a current franchisee to learn more about the business if you can. What are their perceived pros and cons? What’s it like working with this brand? Are there any significant costs associated with this franchise?

Additionally, you need to check if a franchise is already running in your area. If so, the franchiser may be unlikely to approve another location in such close proximity. 

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3. Participate in an interview

A unique aspect of starting a franchise is that it’s not entirely up to you. You have to interview, almost like you’re applying for a job.

The format will depend on which franchiser you choose. The goal will be for you and the franchisor to review the specifics and determine if the franchise is right for you. 

Take note of how much support the franchisors offer during setup and if they provide ongoing training.

4. Write a business plan

A benefit of starting a franchise is that many important aspects are well-established. However, you still need a business plan to cover how you will run your business, forecast sales and expenses, and outline employee needs.

Most importantly, you need a thorough market analysis that shows how this franchise will work in your local market. At a minimum, you need to detail who your target customers are and how they relate to or differ from the current franchise customer base. Luckily, most franchises offer assistance with this part of the process.

Check out our business planning hub to learn more about writing a franchise business plan .

5. Choose a suitable franchise location

Selecting a location can be complicated by specific requirements from the franchise owner. Size, setup, and even the atmosphere surrounding the business may limit your options.

Then, you must consider if the location makes sense from a performance standpoint. 

• Is it going to attract your core customer base? 
• Is there enough foot traffic?
• Is your business easily accessible?

Hopefully, the franchisor will assist in this process. If not, check out our complete guide on selecting a business location for more specific steps.

6. Sign the franchise agreement and review the FDD

Before you sign a binding contract outlining mutual obligations between you and the franchisor—you need to review the Franchise Disclosure Document (FDD) document. 

The FDD contains a wealth of information, including:

• The franchisor’s background: History, business experience, and any litigation or bankruptcy history.
• Financial statements: Provides a clear picture of the franchisor’s financial health.
• Initial and ongoing costs: Details about the initial franchise fee, training costs, grand opening costs, royalty fees, and other related expenses.
• Training and assistance: Information on the training and support the franchisor will provide.
• Franchisee obligations: What is expected of the franchisee in terms of purchasing equipment, maintaining standards, advertising, etc.
• Territory: Whether the franchisee will have exclusive rights to a territory and the specifics of any territorial protection.
• Trademarks: Information about the franchisor’s trademarks, copyrights, and proprietary information.
• Renewal, termination, and transfer: The terms under which the franchise relationship can be renewed, terminated, or transferred.
• List of current and former franchisees: Contact information for current franchisees and those who have left the system recently.
• Earnings claims: If provided, details about the financial performance of existing units, though not all franchisors include this information.
• Restrictions: Details on any restrictions on what can be sold, sourcing and supply, and territory.

Before signing the FDD, review it carefully, preferably with the help of a lawyer . 

7. Make your business legal

Aside from the franchise agreement and FDD, additional legal requirements exist to start your franchise.

• Set up a business structure: The franchisor may specify which business structure you must use.
• Federal and state registrations: At a minimum, you must apply for federal and state tax IDs. However, there may be additional requirements depending on your location.
• Business licenses & permits: Depending on the location and nature of the franchise, various local, state, or federal licenses and permits may be required.
• Tax registrations: Franchisees must register for appropriate federal, state, and local tax identification numbers and comply with tax obligations.
• Insurance requirements: Franchisees often need various insurance coverages, such as liability, property, workers’ compensation, and more, as mandated by law or the franchisor.

8. Stay updated on franchisor policies

Most franchisors provide training programs for new franchisees that cover everything from business operations to customer service.

However, this initial training may not cover everything, and franchisors may update their policies, marketing strategies, or product offerings. 

Staying aligned with these changes ensures brand consistency and can impact the franchise’s success.

Dig deeper:

Should you open a franchise or start a business?

If you’re reading this, you’re likely more interested in opening a franchise than starting a new business. To be sure of your decision, let’s weigh the pros and cons of both options.

Things to consider when comparing franchise opportunities

Choosing the right franchise can be as challenging as developing a good business idea. Simplify the process and use these seven factors to help vet and select the right franchise.

History of franchising

Become familiar with how franchising has evolved into the business model it is today.

• Common types of franchises

Franchising spans a wide range of industries. While there are countless specific franchise concepts—you can group them into several common categories:

Food and beverage 

Establishments that prepare and serve meals and drinks, ranging from quick-service to full-service dining.

• Fast-food restaurants (e.g., McDonald’s, Subway)
• Sit-down restaurants (e.g., Applebee’s, IHOP)
• Coffee shops (e.g., Dunkin’ Donuts)
• Ice cream and dessert parlors (e.g., Baskin-Robbins, Dairy Queen)

Businesses that sell goods directly to consumers from physical locations offering a variety of tangible products.

• Convenience stores (e.g., 7-Eleven)
• Specialty stores (e.g., The UPS Store, GNC)

Franchises providing specialized services to individuals or businesses—emphasizing expertise or personalized care.

• Home services (e.g., Molly Maid, Mr. Handyman)
• Automotive services (e.g., Jiffy Lube, Midas)
• Health and fitness centers (e.g., Anytime Fitness, Gold’s Gym)
• Educational services (e.g., Kumon, Sylvan Learning)

Business-to-Business (B2B)

Franchises that cater to other businesses, offering services that enhance business operations or efficiency.

• Printing and promotional services (e.g., Minuteman Press, FastSigns)
• Professional consulting and coaching (e.g., ActionCOACH)
• Commercial cleaning (e.g., Jan-Pro, Coverall)

Real estate

Operate in the property market, assisting in buying, selling, or leasing properties, with a focus on market expertise.

• Coldwell Banker

Franchises that provide accommodations for travelers, including hotels and motels, emphasizing comfort and amenities.

• Hilton Hotels
• Marriott International
• Holiday Inn

Personal care

Focus on enhancing appearance and well-being, offering services like grooming, beauty treatments, and wellness.

• Hair salons (e.g., Great Clips, Supercuts)
• Spas and beauty treatments (e.g., Massage Envy)

Centered around leisure and entertainment, providing venues or services for relaxation and fitness.

• Children’s entertainment centers (e.g., Chuck E. Cheese’s)
• Fitness and recreational sports centers (e.g., Planet Fitness, Club Pilates)

Cater to niche markets or unique services not covered in other categories, such as specific demographics or specialized needs.

• Pet services (e.g., Petland, Dogtopia)
• Restoration and disaster recovery services (e.g., SERVPRO)
• What franchise should you choose?

It can be quite challenging to choose a franchise since there are over 3,000 different concepts available. 

How do you narrow it down to one? Here are three tips:

1. Figure out what you’re good at

While you’re not coming up with a business idea , you can still use the same tactics to identify a winning franchise opportunity. The easiest place to start is by identifying and listing out your skills, strengths, and passions.

Maybe you’re a relationship-builder, an operations expert, or already have experience working with a franchise. 

If you’re struggling to identify what you’re good at, consider conducting a SWOT analysis on yourself. This will give you a structured way to assess your strengths, weaknesses, opportunities, and threats.

2. Match your skills to franchise opportunities

Use your skills as a reference when exploring franchise opportunities. Remember, you must be a good match for the franchise owner. 

Having industry-specific experience or skills can help sell them on your ability to run their specific type of business.

For instance, if you’re drawn to a commercial cleaning franchise because it’s B2B and aligns with your sales skills. 

3. Keep an eye on market trends

Be vigilant about consumer and business trends to ensure your franchise choice is relevant.

Take note of popular opportunities, but don’t jump on them immediately. Do your due diligence and determine if the franchise trend is sustainable and not a fleeting fad.

As always, fall back on market research to understand consumer spending habits. If the franchise category you’re interested in shows customers straying away from known brands—it may not be the right time to jump in. 

• Start your franchise

Cooking up a brand new business idea has its value, but there’s no reason you can’t piggyback on a time-tested method and reap the benefits—as many franchisees are already doing today. 

If you’re interested in buying a franchise to start or run your own business, learn all you can before you buy.

With planning and thoughtful execution, a franchise business can be just as rewarding as any other startup.

Check out our complete guide on starting a business to ensure you’re prepared to open a successful franchise.

Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.

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